The thin capitalization rules limit the deductibility of an interest expense of a Canadian resident corporation in respect of debts owing to a specified non-resident shareholder generally where the debt to equity ratio in respect of debts owing to specified non-residents exceeds a ratio of 2-to-1. A specified non-resident is generally a non-resident person owning shares representing more than 25% of the votes or value of the corporation alone or together with any other non-resident that does not deal at arm’s length with a specified shareholder. The Advisory Panel on Canada’s System of International Taxation recommended the reduction of the debt to equity ratio. Budget 2012 reduces the debt to equity ratio for this purpose to 1.5-to-1.
A&B is proud to announce that, on March 2, 2012, our firm donated one million Aeroplan miles to the Air Canada Foundation. The not-for-profit organization, which focuses on the health and well-being of children in need, was launched on February 29.
As one of the first donors to Air Canada’s new Foundation, we are pleased that our firm’s Aeroplan miles donation will be used to provide flights to children and their parents so that they can obtain medical care from pediatric hospitals, such as The Hospital for Sick Children in Toronto.
“We are grateful to Aird & Berlis LLP for their generous donation of one million Aeroplan miles to the newly launched Air Canada Foundation,” said Priscille LeBlanc, Chairman of the Air Canada Foundation. “These miles will directly benefit the Hospital Transportation Program which uses donated Aeroplan miles to transport ill children and a parent to centers offering medical treatment unavailable in their community.”
Internet service providers (“ISPs”) are not subject to Canada’s broadcast regulations, according to a decision recently released by Canada’s top court. In Reference re Broadcasting Act, 2012 SCC 4, the Supreme Court of Canada (the “Court”) confirmed a 2010 decision by the Federal Court of Appeal that held that ISPs are not subject to the federal Broadcasting Act (the “Act”) and therefore not required to contribute to the creation of Canadian content.
The Alliance of Canadian Cinema, Television and Radio Artists, the Canadian Media Production Association, and the Directors Guild of Canada and Writers Guild of Canada raised the following question before the Court: do retail ISPs carry on, in whole or in part, “broadcasting undertakings” when, in their role as ISPs, they provide access through the Internet to “broadcasting” requested by end-users? Subsection 2(1) of the Act notably defines a “broadcasting undertaking” to include “a distribution undertaking, a programming undertaking and a network.” The Act further defines the term “broadcasting” to mean “any transmission of programs … by radio waves or other means of telecommunication for reception by the public …”